Overview: Jessops

Jessops, the retailer,
announced three profit warnings earlier this year. Now it has lost its finance
director in moves some are suggesting represent a boardroom struggle.

Analysts are worried that the future looks bleak at the camera outlet, so who
would be its prospective new FD?

What’s happened

On top of the three profit warnings, Jessops has booked a loss for the first
six months of the year of £8.5m, with full-year losses expected to hit £20m. The
company has had difficulty coming to terms with the age of digital cameras. In
June it said it would be cutting 550 jobs and shutting 81 stores.

FD Ian Harris had been in the role at Jessops for less than a year, and had
been recently working on a refinancing with HSBC.

The company said the conclusion of that deal had meant it was time for him to
go, though there are other suggestions that he had fallen out with executive
chairman David Adams, who joined in May, denied by the company.

Whatever happens, Harris leaves with a £180,000 payoff in recognition of his
work.

What’s going to happen

The company has appointed an agency to find a successor to Harris, though it
declined to say which one.

The recruitment specialists will no doubt be scouring their lists of
turnaround specialist FDs, given the state of the company.

The challenge is to embrace a new business model for the digital camera
generation. Customers do not go to get their pictures developed as often as they
used to, and do not necessarily visit specialist camera shops to buy their
digital cameras or the accessories that go with them.

The chairman, Adams, comes with a good reputation, however. Richard Ratner,
an analyst at Seymour Pierce, said: ‘If it hadn’t been for David [Adams], they
wouldn’t have got the bank facility.’

But the HSBC deal is also said to be expensive, a reflection of the risk the
bankers feel they are taking on.

There are also suggestions that Deloitte has been hired to look at options
for the group, whether that means a refinancing or a sale. The shares are down
92% this year, and it is valued at only three weeks’ worth of turnover.

Whoever takes over the finance function will have to engineer a huge
turnaround, and make it snappy.